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Assume an excess-of-loss reinsurance agreement with attachment point of $500,000 and policy limit of $2,000,000 is in place for a primary policy with deductible of

Assume an excess-of-loss reinsurance agreement with attachment point of $500,000 and policy limit of $2,000,000 is in place for a primary policy with deductible of $50,000 and policy limit of $2,500,000. For a loss of $3,000,000, how much will the reinsurer pay?

  • A. 2,950,000
  • B. 2,000,000
  • C. 2,500,000
  • D. 500,000

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